Women without a College Degree, Especially Minority Mothers, Face a Steeper Road to Recovery

Abstract

5 Didem Tüzemen is a senior economist at the Federal Reserve Bank of Kansas City. Samantha Shampine, a research associate at the bank, helped prepare the article. This article is on the bank’s website at www.KansasCityFed.org The labor force participation of prime-age individuals (age 25 to 54) in the United States declined dramatically at the onset of the pandemic as temporary shutdown orders and social distancing measures to fight the COVID-19 outbreak caused substantial job losses and limited job search activities. In February 2020, 83.1 percent of prime-age individuals participated in the labor force, meaning they were either working or actively looking for work. By April 2020, this rate had fallen to 79.8 percent, a decline of roughly 4 million people. Although some prime-age individuals have returned to the labor force since then, as of June 2021, the prime-age labor force participation rate remains well below its pre-pandemic level. Prime-age individuals are in their most productive working years, and a persistent decline in their labor force participation has important implications for the future of the labor market and economic growth. However, understanding the decline requires detailed analysis; aggregate statistics on labor force participation may mask differences in labor market outcomes by sex, educational attainment, and race and ethnicity. Identifying these differences is crucial to both